The tension in US-China trade relations may be easing, along with the news that President Trump has no plans to dismiss Federal Reserve Chairman Powell, which boosted the US stock market on Wednesday (April 23) as the three major indices on Wall Street opened with significant gains.
The Dow Jones Industrial Average rose 1,044 points, a 2.7% increase; the S&P 500 index climbed 3.2%; and the Nasdaq Composite index surged by 4.1%.
According to the Wall Street Journal on Wednesday, citing a White House official, the US government is considering cutting tariffs on Chinese goods to between 50% and 65%.
Trump also mentioned on Tuesday that he could take a less confrontational approach in trade negotiations with China. He noted that the current 145% tariffs imposed on Chinese imported products are “very high” due to a combination of various tariffs. If a deal is reached between the US and China, tariffs would significantly decrease but not drop to zero.
In response to the news of potential easing in US-China trade tensions, the stocks of Apple and Nvidia rose by 3% and 5% respectively.
The stock price of the US electric car giant Tesla also increased by 5%, benefiting not only from the possibility of tariffs between the US and China easing, but also from comments made by Tesla’s CEO Musk during the company’s earnings call on Tuesday, which reassured investors.
Musk stated that starting next month, his involvement in managing the Trump administration’s Department of Efficiency would be “substantially” reduced. This implies that he will refocus his attention on Tesla.
“His time is very valuable, and I think Tesla needs his attention,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, a prominent investor.
The US stock market was further buoyed by the news that Fed Chairman Powell will not be dismissed. Trump stated that he has “no intention” of firing Powell, whose term is set to end in May 2026.
(This article referenced reports from CNBC and Reuters)